Hello and welcome to The Business Roundup with Daisy. This edition presents key developments shaping the business landscape, with a focus on regulatory changes, economic trends, and corporate disputes.
In this edition, we train our focus on:
- KRA’s Customs–VAT Link Overhaul as New Changes Take Effect
- Tomato Prices Jump as Inflation Hits 5.6% in the KNBS report
- Tullow Oil Rejects KSh23 Billion KRA Tax Claim in High-Stakes Oil Asset Sale Dispute
- Perks for Sebastian Sawe After Winning the London Marathon
Major This Week
KRA’s Customs–VAT Link Overhaul as New Changes Take Effect
Starting May 2026, the Kenya Revenue Authority (KRA) will move to a fully automated system that directly links export declarations in the Integrated Customs Management System (iCMS) to VAT returns filed in iTax.
Under the new arrangement, validated export data will be automatically prefilled in VAT returns, eliminating the need for manual entry by exporters.
“Kenya Revenue Authority notifies taxpayers and the public that, effective May 2026, the VAT return export data in iCMS will be integrated with the declaration of zero‑rated supplies in the VAT return in iTax,” KRA stated.
The system will apply across all export categories, including goods shipped under the Single Customs Territory, Export Processing Zones (EPZs), Special Economic Zones (SEZs), and taxable services. Once Customs verifies export documents, the approved values will flow directly into the taxpayer’s VAT return.
To enable auto-prefilling, exporters and clearing agents will be required to correctly capture key details during export processing, including the exporter’s PIN and valid TIMS or eTIMS zero-rated invoice numbers.
Only transactions that are fully validated and properly linked will appear in VAT returns, while incomplete or incorrect entries will be excluded.
KRA said the system is designed to improve accuracy, reduce filing errors, and enhance VAT compliance, particularly for zero-rated exports.
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Exporters have been cautioned that failure to comply with data-entry and invoicing requirements may result in missing export values on VAT returns, potentially leading to penalties or delayed refunds.
Tomato Prices Jump as Inflation Hits 5.6% in the KNBS report
And in other news, Kenyans are raising concerns about rising tomato prices, as fresh data from the Kenya National Bureau of Statistics (KNBS) show continued increases in the cost of basic household commodities.
According to the report, tomatoes recorded one of the sharpest food price increases in the latest review period. Other highlights were as follows:
- Cooking oil prices increased by 2.7 percent, while Irish potatoes went up by 2.8 percent.
- Petrol prices climbed 10.8 percent to KSh198.67 per litre, with diesel rising 17.9 percent to KSh197.81 per litre.
- Transport fares increased significantly, with boda boda and matatu fares rising by about 20 percent.
- LPG (13 kg cylinder) prices increased by 7.3 percent to KSh3,361.56.
- KNBS data shows annual inflation stood at 5.6 percent in April 2026, driven mainly by food, transport, and housing costs.
- Electricity costs declined slightly by 0.6 percent, and some food items, such as cabbage and oranges, also dropped in price.
Food and non-alcoholic beverages rose by 8.8 percent over the year, while transport costs increased by 10.0 percent, reflecting widespread price pressure across essential services.
Tullow Oil Rejects KSh23 Billion KRA Tax Claim in High-Stakes Oil Asset Sale Dispute
Elsewhere, a major tax dispute has emerged after Tullow Oil dismissed a KSh23 billion assessment issued by the Kenya Revenue Authority (KRA), linked to the sale of its Kenyan subsidiary to Gulf Energy.
The claim concerns alleged unpaid VAT and Capital Gains Tax arising from the $120 million (KSh15.5 billion) transaction.
The tax authority argues that the disposal of Tullow Kenya BV was undervalued for tax purposes, resulting in an estimated underpayment of approximately $170 million (KSh23 billion). The assessment has now triggered a formal challenge from the oil firm.
At the center of the dispute is how Kenya taxes oil sector asset transfers, which typically attract Capital Gains Tax on gains from the sale of locally situated petroleum rights, licenses, or shares linked to extractive assets. VAT and withholding tax may also apply, depending on the transaction structure.
Tullow Oil maintains the assessment has no legal basis and confirms it will contest the claim jointly with Gulf Energy through Kenya’s tax dispute resolution framework. The company has signaled it does not expect any immediate cash outflow during the objection or appeal process and has not made any financial provision for the disputed amount.
The case now moves into the formal tax objections stage, with potential escalation to the Tax Appeals Tribunal if no settlement is reached.
Perks for Sebastian Sawe After Winning the London Marathon
President William Ruto, on April 30, awarded Sabastian Sawe KSh8 million at State House following his record-breaking performance at the London Marathon, including KSh5 million for breaking the world record and KSh3 million as a gold medal reward.
Sawe had earlier delivered a standout performance in London on April 26, clocking 1:59:30 to win the marathon and break the previous world record of 2:00:35 set by Kelvin Kiptum in 2023.
He finished ahead of Ethiopia’s Yomif Kejelcha and Uganda’s Jacob Kiplimo in a tightly contested race.
Also Read: Landlords to Face Over KSh 50,000 in KRA Penalties for Late Filing and Payments
From the London Marathon winnings and bonuses, Sawe is expected to earn about KSh46 million before deductions.
This includes:
- Winner’s prize: $55,000 (about KSh7.11 million)
- Course record bonus: KSh3.2325 million
- World record bonus: KSh16.1625 million
ALSO, BIG THIS WEEK
The High Court has upheld a directive by the National Transport and Safety Authority (NTSA) on graffiti, paving the way for a nationwide crackdown on public service vehicles (PSVs) decorated with graffiti, artistic designs, and tinted windows, commonly referred to as nganyas.
Kenyans have expressed mixed reactions after the Ministry of Education announced an allocation of Ksh 95 per learner in public primary schools for textbook maintenance, exercise books, teachers’ guides and reference materials, and stationery.
Alliance Girls High School principal Margaret Njeru is set to face disciplinary action after the Ministry of Education found that the school implemented a large, unauthorized fee increase, placing a heavy burden on parents and guardians.
Coming Up
The Recording Academy has announced that its CEO, Harvey Mason Jr., will visit Nairobi from May 26 to May 29, 2026, where he is expected to meet President William Ruto as part of scheduled engagements.
Currency Trends
The Kenya Shilling recorded mixed but generally stable movements against major international currencies in the latest trading session.
It traded at KSh129.19 against the US dollar, reflecting marginal fluctuations in line with recent market trends.
Against other major currencies, the shilling exchanged at:
| Currency | Exchange Rate (KSh) |
|---|
| US Dollar | 129.19 |
| Sterling Pound | 174.13 |
Quote of the Week
As we wrap up this week’s key developments in taxation, prices, trade disputes, and sports milestones, a reminder on systems, discipline, and outcomes in both markets and life:
“Discipline is choosing between what you want now and what you want most,” ~Abraham Lincoln
